In the recent G-20 summit, there was the usual amount of posturing, boring speeches that resulted in lots of good vibes but very little in the way of constructive dialogue, and lots of talk about things we “should” do and “need” to do. But of course, just like every meeting where a bunch of extremely well paid middle age people sit around and talk, the actual accomplishments were outnumbered by the level of perceived ones by a factor that looks like a percentile. It would be rather like a comparison between a lion and a guinea pig to see perceptions side by side with reality.
As always, every country wanted to make their stance seem as powerful as humanly possible. Given that these are all finance ministers, the primary type of “weinie wagging” being performed were the displays of strength and stability related to each country’s respective currency. When it comes to trade, every nation wants its currency to be the one that permits the most profitable exports — in other words, a relatively low currency. But when it becomes a matter of politics, there are some very creative practices governments can use to make their currencies go higher relative to commodities such as gold and silver prices.
For one thing, governments can hold press conferences in which every word they say will be repeated, judged and scrutinized. As they have entire teams committed to (and highly skilled in) making each word convey precisely the right message, these world leaders can imply what they may not say outright, and may say what may later be revealed as “errors.” Keep in mind that the G-20 summit was only for two days, and that what happened afterward would be of lower importance politically than what happened during the meeting. The less valuable a commodity appears against a currency (if only for a few days), the better said currency looks relative to others.